## Facts

- The University of Chicago lent $75,000 to George R. Dater and John R. Price, Michigan residents, secured by a trust deed (mortgage) on their Chicago, Illinois real property.
- Promissory notes and the trust deed were prepared for execution; the notes were payable in Chicago.
- The instruments were mailed to Michigan, signed in Benton Harbor, Michigan by the borrowers and their wives, and returned to Chicago, where the trust deed was recorded and the loan proceeds were disbursed.
- Under Illinois internal law at the time, a married woman generally had capacity to contract; under Michigan law, a married woman lacked capacity to incur personal liability on such notes absent a qualifying relation to her separate estate.
- John Price died, and his widow, Clara A. Price, became record owner of at least one-half of the mortgaged property.
- After default and foreclosure in Illinois (with the University purchasing at the sale), the University sued in Michigan on the notes to obtain a deficiency judgment, including personal liability against Clara A. Price.

## Issues

1. Which state’s law governs a married woman’s capacity to incur personal liability on promissory notes executed in Michigan but payable and effectively completed in Illinois.
2. If Illinois law applies, whether Illinois choice-of-law rules would refer the capacity issue back to Michigan law (renvoi), resulting in no personal liability.

## Decision

- The Michigan Supreme Court affirmed the trial court’s judgment of no cause of action as to Clara A. Price.
- The court held that no personal judgment could be entered against Clara on the promissory notes in the Michigan action.
- The judgment against George R. Dater was left intact (not appealed).
- Three justices dissented, reasoning that the obligation should be treated as an Illinois contract governed by Illinois internal law, under which Clara would be bound.

## Legal Principles

- A conflict-of-laws analysis may treat contractual capacity (especially marital capacity/status) as a distinct issue from contract “validity, nature, obligation, and interpretation,” and therefore not automatically controlled by the place of performance.
- When the forum refers to another state’s “law,” it may consider that state’s whole law, including its conflict-of-laws rules; if those rules select the forum’s law on the specific issue, the forum may apply its own law (renvoi).
- Under Michigan law then in force, a married woman who executed such notes in Michigan without a qualifying connection to her separate estate could not be held personally liable in Michigan on the notes.

## Conclusion

The court refused to impose personal deficiency liability on a married woman who signed loan notes in Michigan for an Illinois-secured transaction, reasoning that Michigan law governed her capacity, and that even if Illinois law were consulted, Illinois conflicts principles would point back to Michigan law on capacity, producing the same result.


Univ. of Chi. v. Dater, 277 Mich. 658, 270 N.W. 175 (Mich. 1936)